Agricultural
Transformation and Rural
Development
Name:
Refika Dwi C1G015007
Dirani Yulia C1G015011
Hasrin Ainun C1G015025
Abdul Jamil C1G015028
Andika Permana
C1G015029
Sonia Isabella C1G015030
The Imperative of
Agricultural Progress
and Rural Development
The heavy emphasis in the past on rapid
industrialization may have been misplaced
Agricultural development is now seen as
an important part of any development
strategy
Three basic
complementary elements
1. Accelerate output growth
technologycal, institutional and price
incentive change
2. Rising domestic demand for
agriculture output
3. Non-agricultural rural labor intensive
rural development activities that are
supported by the farming community.
Agricultural growth:
Past progress and
current challenges
2.1 Trends in agricultural productivity:
World Bank
The developing world experienced
faster growth in the value of agricultural
output (2.6% per year) then the
developed world (0.9% per year)
Developing countries share of
agricultural GDP rose from 56%-65% in
this period, far higher than their 21%
share of world non agricultural GDP
CONTRIBUTIONS OF
AGRICULTURE TO
The purpose of agricultural produce
DEVELOPMENT
Farmers have demand for
manufacture consumer good and
capital goods
Agriculture employs a large
number of the labour force
Contribution to the total GDP
Impact of agriculture on poverty
reduction as growth improves
WHY AGRICULTURAL GIVES
LOW PERFORMANCE?
Low agriculture financing
Bureaucracy, departmentalization, and
enforcement challenges create resource
allocative inefficienc
Inadequacy of support programmes to help small
farmers
Low of investment in human capital
Low investment in social and physical capital
Low industrialization in rural areas due to urban
biases
Less market for agricultural produces
Limited investment in technological advancement
High levels of inequalities
Rapid population growth
Poverty and governance challenges
Green Revolution
The boost in grain production
associated with the scientific
discovery of new hybrid seed varities
of wheat, rice, and corn that have
resulted in high farm yields in many
developing countries
The aim of the green revolution was
to increase food production and
encourage self-sufficiency in LDC’s
Problem have been caused
by the green revolution
An increase in rural to urban
migration
Rural poverty
The fertilisers and machinery was
often too expensive for farmers
Many people were made
unemployed by the introduction of
machinery
2.2 Market Failure and
the Need For Government
The presence of market failures and poverty
Policy
allevation goals-create need for constructive
government role in agriculture
Roles for Government in Agricultural
Development
1. Environment externalities
2. Agricultural research and extension services
3. Economies of scale in marketing
4. Informational asymmetrics in product quality
5. Providing institutions and infrastructure
6. Ensure shared growth in agriculuture sector
7. Addressing poverty traps
The Important Role of
Women
Women provide 60% to 80% of
agricultural labor in Africa and Asia,
and 40% in Latin America
Women work longer hours than men
Government assistance programs
tend to reach men, not women
RURAL DEVELOPMENT
STRATEGIES
According to (Todaro & Smith,
2012:452) Rural development,
encompasses
a)efforts to raise both farm and nonfarm
rural real incomes;
b)a decreasing inequality in the
distribution of rural incomes;
c) successful attention to the need for
environmental sustainability;
d)the capacity of the rural sector to
sustain and accelerate the pace of
these improvements over time.
Making farm inputs
available
Intensifying input-based production,
centred on seed varieties with higher
productive potential and the fertilizers and
pesticides to realise these potentials,
was the focal point of the Green
Revolution in Asia (OECD, 2006:32)
Technology inputs
Modern mechanical inputs
Chemical inputs, high-yield seed
varieties, better livestock breeds and
irrigation
Institutional pricing and tax policies
Infrastructural
developments:
Infrastructural development involves
construction of roads, irrigation
structures, storage facilities, and
renewable energy enhanced by rural
electrification and industrialization.
Infrastructural development will
increase productivity but also create
networks that connect rural areas to
urban-industrialized areas thus improving
market for agricultural produce needed
in urban areas for food and in
industrial plants as raw materials.
Financial sectoral
development in rural
This includes providing enough funds
areas
to agricultural sector and improving
access to credit services to increase on
purchases of inputs and equipment
needed to increase productivity.
However, these increases must be
followed by the efficient allocation,
utilization, and management of such
resources if they are to stimulate
and lead to the desired growth and
development of the sector (Naluwairo,
2011).
Land Reforms
Land reform is one of the necessary
conditions to achieving a people-
centered transformed agriculture and
rural development. If programs of land
reform can be legislated and effectively
implemented by the government, the
basis for improved output levels and
higher standards of living for rural
peasants will be established (Todaro
& Smith, 2012:451).
Legislations should promote equal
rights to accessibility, control, and
ownership of land; thus protecting the
rural poor from exploitation and
manipulation by the rich and
protecting women from conflicting
with men over land rights.
Distribution of fertile land among
small farmers and landless farmers
and compensation of owners for loss
of land is also a prerequisite for rural
development.
Reforms will solve environmental
challenges associated with land
fragmentation and degradation;
gender related issues in rural areas;
as well conflicts and migration
challenges. Land reforms and
policies that entail objectives of
integrated rural development will
work for all disadvantaged groups.
The Structure of
Agrarian Systems in the
Developing World
1. Agriculture Based countries: agriculture
is major source of economic growth, large
share of GDP
-sub Saharan Africa and few African
Countries
2. Transforming Countries: Rural is very
high but small share to GDP growth
- South and East Asia, North Africa and the
Middle East
3. Urbanized Countries: Half or more even
of the poor found in urban areas less
output growth
-Latin America
The Economics of
Agricultural
Development: Transition
From Peasant to
Subsistence farming: risk aversion,
Commercial Farming
uncertainty, and survival
The transition to mixed and
diversified farming
From divergence to specialization:
modern commercial farming
Toward a Strategy of
Agricultural and Rural
Development
Improving small-scale agriculture
Conditions for rural development
